Tuesday, October 9, 2007

Greek Market

General economic indexes:

This country is quite economically and politically developed and stable recent years, but it is the fact that it is one of the poorest members of the European Union members. Moreover, some European representatives consider that Greece is a drain on the overall European Unions economic results. The GDP of Greece equals to 226,400,000,000 USD approximately, the GPD per capita equals to 21,300 USD approximately (these are good indicators for Greece); inflation rate equals to 3.4 percent, unemployment rate equals to 11 percent (quite large indicator), external debt equals to 57,000,000,000 USD, industrial growth rate in Greece makes 7 percent a year. All these indicator prove that Greece is a developed country and its average statistical citizen can afford drinking expensive spirits such as whiskey from most price categories.

Drinking preferences:

Greece is a very ancient country with long and interesting history. From the very beginning of a Greek history its population consumed alcohol especially wine. Wine was an essential attribute of the meals. Of course spirits are not alien to Greeks.

So malt whiskey are completely compatible with the Greek market of spirits.

Investment Climate

a. General information:

Greece is a member of many international business organizations such as World Trading Organization, World Customs Organization and others. Its major investors are European Union members and the United States of America. Greek economy is not so open to the foreign investments as other countries are even though there was established an agency which has to attract investments to Greece (the Hellenic center for investments or ELKE). However Greek government makes steps and improvements to make investment climate in Greece more attractive to foreign investors (for instance subsidies and other incentives). Domestic investors have privileges comparing to the foreign one. But despite of investors origin they receive significant incentives if operating in the less developed Greek regions.

Banking system and financial sector correspond to the norms of the European Union and developed enough. Getting a credit in Greece is not very complex procedure both for domestic and foreign investors.

b. Taxation:

Greek income taxation system bears progressive character. Personal income tax rate varies from 5 up to 40 percent of personal taxable income. Corporate income tax rate equals to 32 percent from the taxable profits (but there is an exception for partnerships income tax rate equals to 25 percent).

Social contributions from employers equal to 28 percent of the wages fund. From 2005th year value added tax (VAT) in Greece equals to 19 percent (this is not too much for European country). VAT is imposed on all goods in services which sold within a country. Additionally there is a reduced VAT rates exist in Greece (9 percent and 4.5 percent).

Dividends paid are not subject to Greek taxation provided.

So taxation rates are quite moderate in Greece.

c. Legislation:

There is an expropriation of private property possible in Greece under certain conditions but in such case all costs will be refunded to the owner. All commercial laws are harmonized with international law and the legislation of the European Union. Thus Greek legislations and regulations can be considered as transparent and consistent so-called: Foreign companies, however, report that they have encountered cases where there are multiple laws covering the same issue, resulting in confusion over which law applies in which situation, and very complicated! Very often Greek courts often make controversial and not logical decisions.

d. Corruption:

The problem of corruption obviously exists in Greece. The officials of all ranks are involved in bribery (up to ministers). Greek legislation provides severe punishment and penalties for corruption and bribery, the government actively struggles against these phenomenon.

e. Competition:

One of the most significant Greek branches of economy is tourism. Hence tourists consume lots of Greek goods and services each year and fulfill the budget significantly. This factor makes all major producers of alcohol and alcohol beverages to sell their products in Greece. Consequently competition on a Greek market is quite developed and it would not very easy to enter this market without the appropriate marketing strategy and finances.

f. Entering barriers and other disadvantages:

A disadvantage of Greece market is that there are only three free-trade zones located at the Piraeus, Thessaloniki, and Heraklion port areas. Another disadvantage of investing money in Greek economy is that intellectual rights are not protected on adequate level, trademarks are not protected too. Thus there can occur misunderstandings and frauds.

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